Genius Group Forced to Liquidate Its Bitcoin Holdings, Here’s Why

Genius Group, a Singapore-based education and technology company, must sell its Bitcoin holdings following a US court order. The decision is part of its legal dispute that has blocked the company from raising funds, issuing shares, or making further Bitcoin purchases. 

The Genius Group Lawsuit

In a major development, a United States court ruling has placed strict financial restrictions on Genius Group, preventing it from issuing shares or raising capital. 

The firm’s announcement shows that the American District Court for the Southern District of New York approved a preliminary injunction halting its ability to generate revenue through stock sales.

The dispute was a precedent from a collapsed agreement between Genius Group and Fatbrain AI. Genius attempted to cancel a deal with Fatbrain AI, leading to fraud accusations from shareholders and an SEC investigation. 

The legal dispute, as described by the firm, has now come with a Temporary Restraining Order (TRO), blocking access to investor funds and forcing the company to start selling its Bitcoin holdings.

Reports indicate that Moe and Ritz were accused of orchestrating a scheme to extort millions from Genius Group by misusing legal processes, including the Temporary Restraining Order (TRO) and Preliminary Injunction (PI). On February 14, 2025, they filed for a TRO and PI to prevent Genius from selling any shares, raising funds, or utilizing its $150 million ATM funding, specifically blocking the purchase of Bitcoin. 

As a result, the court placed a temporary restraining order on Genius Group, blocking access to investor funds and forcing the company to begin selling its Bitcoin holdings.

Unfortunately, Genius Group said its BTC reserves have dropped from 440 BTC to 430 BTC. If the legal battle continues, potential sales may follow. Since the ruling, Genius’ share price has dropped 53% from $0.47 to $0.22, and the Company’s market capitalization is currently 40% of the value of its Bitcoin Treasury.

Genius Group Bitcoin Pivot and Related Firms

Genius Group is one of the growing number of corporate institutions investing in Bitcoin. In November 2024, the Genius Group implemented a bold Bitcoin-first strategy, allocating Bitcoin as its treasury reserve asset.

Chief Executive Officer Roger James Hamilton has advocated for Bitcoin, positioning Genius Group as a Bitcoin-first company. The company adopted cryptocurrency as a financial strategy, borrowing MicroStrategy’s BTC playbook. 

Earlier, it approved a $33 million rights offering to buy BTC. However, the court order may force it to change its approach to Bitcoin acquisition.

Firms like Strategy, Metaplanet, and Tesla have added Bitcoin to their balance sheets, seeing it as a hedge against inflation and economic uncertainty. Strategy has been more aggressive with its Bitcoin acquisition campaign. Recently, MicroStrategy acquired 22,048 BTC for $1.92 billion at an average price of $86,969 per Bitcoin.

Should Pro-Bitcoin Firms be Concerned?

Meanwhile, the legal case against Genius Group raises concerns for other companies holding Bitcoin. 

While firms like MicroStrategy continue to accumulate Bitcoin, Genius Group’s case shows the legal risks involved. Many experts believe that as long as an organization adheres to the stipulated guidelines set by the authorities, there is nothing to fear regarding lawsuits. 

While this may not have been the case with the previous administration, the current US SEC leadership has maintained a largely pro-crypto stance.

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